Solution of the Dice 2007 Integrated Assessment Model in Continuous Time and Evaluation of the Dice 2007 Savings Ratio Constraint

This research demonstrates a solution for the DICE 2007 integrated assessment model in the continuous domain through the use of a Runge-Kutta sampling technique for solving differential transcendental equations. The use of a savings ratio helper constraint was not required. It is shown that the introduction of a savings ratio constraint leads to a 12% underestimation of maximum atmospheric temperature rise. In addition, evidence of a savings ratio within economic data was unable to be confirmed using the equivalent proxy of an investment ratio and model selection techniques for mixed Gaussian probabilistic graphical models. However, evidence of a dilute intertemporal relationship between investment and an increase in production was detected. The results of this research support the use of Runge-Kutta sampling differential transcendental solvers with Chebyshev function outputs for continuous solutions in integrated assessment models without the requirement for helper constraints.
Category:Economics and Finance